Serum Institute Of India Ltd. vs State Of Maharashtra And Ors.
2003 Latest Caselaw 753 Bom

JUDGMENT

D.Y. Chandrachud, J.

1. Rule. Respondents waive service. By consent taken up for hearing forthwith.

2. The Petitioner is engaged in the manufacture and sale of vaccines, Anti Serum and other pharmaceutical products and has a factory at Hadapsar. The lands of the petitioner are comprised in Survey Nos. 203 to 206, 212 to 214 and 268 to 270. On 11th September 1997, a notification was issued by the Urban Development Department of the State Government by which 38 villages were included within the jurisdiction of the Pune Municipal Corporation. The lands of the petitioners which fall within the grampanchayat area of Sade Satra Nalli, village Hadapsar came to be included in the limits of the Pune Municipal Corporation. In 2001, the Petitioner desired to construct an additional factory building on the property and approached the Pune Municipal Corporation for the grant of permission for construction under the Maharashtra Regional and Town Planning Act, 1966. The Building Control Department and the Development Planning Department of the Municipal Corporation granted permission to the Petitioner subject to the payment of development charges and other incidental charges under Section 124A of the Act. These charges were assessed at Rs. 32,22,537/- and on the payment thereof a commencement of certificate came to be issued to the Petitioner. There is no dispute about the fact that when the building plans submitted by the Petitioner were sanctioned by the Municipal Corporation, the property of the petitioner was within the limits of the Corporation and the Corporation was entitled in law to recover the development charges and other incidental charges in accordance with the provisions of the Act.

3. The contention of the petitioner is that after the commencement certificate was issued by the Municipal Corporation, by a Gazette Notification date 17th November 2001 of the Urban Development Department under the Bombay Provincial Municipal Corporations Act, 1949, areas of 17 Grampanchayats have been excluded from the limits of the Pune Municipal Corporation. There is no dispute bout the fact that as a result, the properties of the petitioner ceased to fall within the limits of the Pune Municipal Corporation. The contention of the Petitioner is that now that the lands have been excluded from the jurisdiction of the Municipal Corporation, the Corporation cannot retain the amount of Rs. 32.22 lakhs paid by the Petitioner on account of development and other charges. The contention of the Petitioner is that the actual work of construction commenced in December 2001 after the exclusion of the lands from the limits of the Municipal Corporation in pursuance of the Gazette Notification dated 17th November 2001. According to the Petitioner, the charges under Section 124A can be levied and collected only when services and amenities are provided by the Municipal Corporation and not otherwise.

4. An affidavit in reply has been filed on behalf of the Municipal Corporation in which it has been asserted that when the lands belonging to the Petitioner were included within the limits of the Municipal Corporation, the Petitioner had submitted an application seeking building permission to construct additional buildings. A building permission was granted by the concerned Department of the Corporation and upon the recovery of development charges and other incidental charges under Section 124A, a commencement certificate was issued. According to the Municipal Corporation, at the time of the sanctioning of the building plan, it recovers the amounts due towards development charges and utilises these for providing services, benefits facilities and amenities to the public at large residing within the area of the Municipal Corporation. When the building plan submitted by the Petitioner was sanctioned by the Corporation, the lands belonging to the Petitioner were within the Municipal Limits and the Corporation, it is asserted, had the right and authority to recover development charges in accordance with the provisions of the Act. The amount, it is asserted, has been utilised for public purposes and cannot now be refunded. The amount upon recovery is credited to the account of the Development Fund. The moneys thus realised are utilised for providing public amenities in the area and for the maintenance and improvement of the area under the jurisdiction of the Municipal Corporation. The Municipal Corporation has stated that initially it grants a building permission for one year, subject to the payment of development charges and the applicant is entitled to commence construction within that period or to apply for an extension. It has been contended that the payment of the development charges is not conditioned by the commencement of construction inasmuch as the amount due under Section 124A is recovered at the time of sanctioning of the layout plan or building permission.

5. In order to consider the tenability of the submission which has bene urged on behalf of the Petitioner, it would be instructive to advert to the relevant provisions of the Maharashtra Regional and Town Planning Act, 1966. Chapter VI-A of the Act which was inserted by Maharashtra Act 16 of 1992 provides for the levy, assessment and recovery of a Development charge. Section 124A, in so far as is material, provides as follows:

"124A. (1) Subject to the provisions of this Act, the Planning Authority or the Development Authority (hereinafter in this Chapter collectively referred to as "the Authority"), shall levy within the area of its jurisdiction development charge on the institution of use or change of use of any land or building, or development of any land or building, for which permission is required under this Act, at the rates specified by or under the provisions of this Chapter:

Provided that, where land appurtenant to a building is used for any purpose independent of the building, development charge may be levied separately for the building and the land.

(2) The development charge shall be leviable on any person who institutes or changes the use of any land or undertakes or carries out any development:"

The provisions for assessment and recovery are enunciated in Section 124E. Sub-section 1 of Section 124E provides as follows:

"124E. (1) Any person who, after the commencement of the Maharashtra Regional and Town Planning (Amendment) Act, 1992, intends to carry out any development or institute or change ny use of any land or building for which permission is required under this Act, whether he has applied for such permission or not, or who has commenced carrying out any such development or has carried out such development or instituted or changed any such use, shall apply to the Authority within such time and in such manner as may be prescribed, for the assessment of development charge payable in respect thereof."

Section 124J provides for the establishment of a Development Fund into which all moneys received by the authority as development charge are to be credited. Sub-section (3) of Section 124J provides that the moneys credited from time to time to the said fund shall be applied only for the purpose of providing public amenities in the area and for the maintenance and improvement of the area under the jurisdiction of the authority.

6. Now, a perusal of the relevant statutory provisions would establish that the Development charge is levied under Sub-section (1) of Section 124A on the institution of use or change of use of any land or building or development of any land or building for which permission is required under the Act. Section 43 of the Act provides that after the date on which a declaration of intention to prepare a Development plan for ny area is published in the Official Gazette, no person shall institute or change the use of any land or carry out any development of land without the permission in writing of the Planning Authority. Under Section 44 of the Act, any person other than the Central or State Government or local authority, intending to carry out any development on any land has to make an application in writing to the Planning Authority for permission. Thereupon, under Section 45, the Planning Authority can either grant or refuse permission. Sub-section (2) of Section 45 provides that a permission granted under Sub-section (1) shall be contained in a commencement certificate in the prescribed form. Section 48 provides that a permission for development shall remain in force for a period of one year fro the date of receipt of the grant after which it shall lapse. The Planning Authority, however, is empowered to extend the permission from year to year subject to a maximum of three years.

7. A developer intending to institute or change the use of any land or intending to carry out development on land is required to apply for the grant of permission the Planning Authority under the Act. By and as a result of the provisions of Section 124A, a development charge is leviable on the institution of use or change of use of any land of building or the development of any land or building for which permission is required under the At. A developer who seeks to carry out development on land falling within the municipal limits is hence required by law to move the Planning Authority for its permission which is granted in the firm of a commencement certificate. Development charges are recovered upon the sanction granted by the Municipal Corporation to the Building plan. The commencement certificate is an authority for the developer to commence the work of development. If, at the time when the commencement certificate is granted, the land in respect of which development permission is sought falls within Municipal limits, the developer is obliged under the law to pay the development charges. The date when the actual work of construction commences, is not material because the commencement certificate authorises the developer to commence construction forthwith. The period, initially of one year during which is commencement certificate is to remain alive and the provision for an extension of the time prescribed by the Commencement Certificate does not postpone the levy of the development charge. The development charge becomes leviable immediately after the permission which is sought by the developer is granted by the Municipal Corporation.

8. That being the position, in the facts of the present case, there is no dispute about the fact that the development charge was validly levied. The subsequent exclusion of the land whereon the properties of the petitioner are situated from Municipal limits, will not have the effect of invalidating the levy of the development charge which was valid when it was made. Once the moneys have been paid by the developer, they are credited to the Development Fund and utilised for the provision of public amenities, and for the maintenance and improvement of the area under the Authority. The Authority is not required to demonstrate an exact or mathematical co-relationship or quid pro quo between the development charges which are paid and the amenities which made available to the public in general, as public amenities for the area and for the maintenance and improvement of the area under the jurisdiction of the authority.

9. In the circumstances, there is no merit in the contention of the petitioner. The petitioner is not entitled to a refund of the Development charges which were validly levied and collected. The petition is rejected.